Correlation Between Continental Holdings and Acbel Polytech
Can any of the company-specific risk be diversified away by investing in both Continental Holdings and Acbel Polytech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Continental Holdings and Acbel Polytech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Holdings Corp and Acbel Polytech, you can compare the effects of market volatilities on Continental Holdings and Acbel Polytech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Continental Holdings with a short position of Acbel Polytech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Holdings and Acbel Polytech.
Diversification Opportunities for Continental Holdings and Acbel Polytech
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Continental and Acbel is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Continental Holdings Corp and Acbel Polytech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acbel Polytech and Continental Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Continental Holdings Corp are associated (or correlated) with Acbel Polytech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acbel Polytech has no effect on the direction of Continental Holdings i.e., Continental Holdings and Acbel Polytech go up and down completely randomly.
Pair Corralation between Continental Holdings and Acbel Polytech
Assuming the 90 days trading horizon Continental Holdings Corp is expected to under-perform the Acbel Polytech. But the stock apears to be less risky and, when comparing its historical volatility, Continental Holdings Corp is 1.15 times less risky than Acbel Polytech. The stock trades about -0.06 of its potential returns per unit of risk. The Acbel Polytech is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,690 in Acbel Polytech on September 3, 2024 and sell it today you would lose (380.00) from holding Acbel Polytech or give up 10.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Continental Holdings Corp vs. Acbel Polytech
Performance |
| Timeline |
| Continental Holdings Corp |
| Acbel Polytech |
Continental Holdings and Acbel Polytech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Holdings and Acbel Polytech
The main advantage of trading using opposite Continental Holdings and Acbel Polytech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Holdings position performs unexpectedly, Acbel Polytech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Acbel Polytech will offset losses from the drop in Acbel Polytech's long position.| Continental Holdings vs. BES Engineering Co | Continental Holdings vs. Chien Kuo Construction | Continental Holdings vs. Hung Sheng Construction | Continental Holdings vs. YungShin Global Holding |
| Acbel Polytech vs. Cheng Uei Precision | Acbel Polytech vs. Gemtek Technology Co | Acbel Polytech vs. Kinpo Electronics | Acbel Polytech vs. Darfon Electronics Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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